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Consumers Bancorp and Peoples Bancorp of Mt. Pleasant, Oh. to merge

Christian Fernsby |
Consumers Bancorp will acquire Peoples Bancorp of Mt. Pleasant and its wholly-owned subsidiary, The Peoples National Bank of Mount Pleasant which operates three banking offices located in the communities of Mt. Pleasant, Dillonvale and Adena, Ohio.

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As of March 31, 2019, Peoples Bank had approximately $79 million in assets, $53 million in loans and $70 million in deposits.

Under the terms of the merger agreement, Peoples shareholders will have the right to receive for each share of Peoples common stock, at the election of each shareholder, and subject to proration, (i) $1,200.00 in cash, or (ii) 63.16 shares of Consumers common stock, or (iii) mixed consideration of cash and Consumers common stock.

The proration procedures are designed to result in 50% of Peoples shares being exchanged for cash and 50% for Consumers stock.

Based on Consumers' 20 day average closing price of $19.07 on June 13, 2019, the aggregate implied transaction value is approximately $10.3 million.

The transaction is expected to close in the fourth quarter of 2019, subject to customary closing conditions, required regulatory approvals and approval by holders of a majority of Peoples shares outstanding.

All of Peoples' directors have entered into voting agreements (representing approximately 20.0% of the total shares outstanding) to vote their shares in favor of the merger.

Consumers currently expects the merger to be approximately 8-9% accretive to earnings per share in fiscal year 2021, including fully realizing cost savings, and approximately 6.5% dilutive to tangible book value per share at closing with an earn back period of approximately four years (using the cross-over method).

The earnings per share accretion estimates are based on estimated cost savings of approximately 35% of Peoples' non-interest expense, and one-time transaction related expenses of $1.6 million pre-tax.

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